In today's indirect auto lending industry, dealers maintain lists of “contracts in transit”, which are contracts that have been assigned to a lender who has not yet paid the dealer. Often times, a dealer's list of contracts in transit grows because of a missing or incomplete document supporting the contract, such as a proof of identity, income, residence, insurance, title, paperwork, etc. that prevents the lender from purchasing the contract from the dealer. Lenders say that dealers will often fax in or email via an unsecured channel these one-off documents days after the contract was initially received. Processing these faxed in or emailed “trailing docs” is operationally inefficient for the lender. In most cases, the lender must figure out to which application the document is related, classify the document, scan the document to store a digital image for audits, key in the information off of the document, and analyze the document according to their written policies and procedures.
Direct auto lending, and direct lending in general, is not much better. Loan officers call applicants who apply for credit online, over the phone, or via fax to inform them of the documents required to clear stipulations. Primary applicants and co-applicants have to submit stipulations via fax, email, or upload them using their desktop computer for manual review by the loan officer. Depending on the loan officer's availability, it may take days for the applicants to receive feedback on whether their documents satisfy the lender's stipulations.
In today's world of indirect auto lending, dealers use software products such as DealerTrack™, RouteOne™, and CUDL™ to submit loan applications on behalf of primary and co-applicants to lenders. Lenders respond with adverse actions or conditional approvals, many of which require certain stipulations to be met pertaining to specific documents before they will purchase the contract from the dealer. When a dealer receives a conditional approval requiring stipulations via DealerTrack™, RouteOne™, or CUDL™, the dealer currently does not have a process that enables them to select which of the documents pertaining to the lender's stipulations they want to ask the primary applicant, the co-applicant, and/or their own personnel to snap pictures of using a phone's camera and get instant feedback on whether the images will help satisfy a stipulation.